First Uranium Resources Ltd. Executes Binding Letter of Intent to Acquire Reefton Goldfields Inc. by Way of Reverse Takeover
1500 – 1055 WEST GEORGIA STREET
VANCOUVER, BRITISH COLUMBIA
V6E 4N7
FIRST URANIUM RESOURCES LTD. EXECUTES BINDING LETTER OF INTENT TO ACQUIRE REEFTON GOLDFIELDS INC. BY WAY OF REVERSE TAKEOVER
- Reefton Goldfields Inc. (“Reefton”) holds 50% of the prolific Reefton
Goldfields District of New Zealand, which had historical production of 2.1m oz gold at an avg grade of 12.3 g/t Au.*
- The application of modern exploration techniques to find new high
grade ore shoots has been validated by 4 significant mineralized intersects at the newly discovered Pactolus Vein, highlighted by 12m @ 9.41g/t Au (DD_PAC_04) and channel sampling on surface of 7m @ 16.4 g/t Au.*
- Recently acquired Glamorgan tenements offers shareholders exposure
to a potentially significant high-grade epithermal target 2.8km away from OceanaGold’s WKP Deposit that current CEO Simon Henderson played a significant role targeting in 2012.
- Chairman and largest shareholder is native New Zealander Oliver
Lennox-King, who was formerly Chairman of Fronteer Gold ($2.3 Bn buyout) and Rox Gold ($1Bnbuyout)
- Notable shareholders and advisors include the former Executive
Chairman of Yamana Gold, Peter Marrone, and current Executive Chairman of Cormark Securities, Scott Lamacraft
- Immediately creates a new, well funded high-grade explorer backed by a
proven team of explorationists and company builders
LEGAL_40958097.1
Vancouver, B.C. – March 29th, 2023 – First Uranium Resources Ltd. (“First Uranium” or the “Company”) (CSE: URNM / OTCQB: KMMIF) is pleased to announce that it has entered into a binding letter of intent (“LOI”) with Reefton under which First Uranium will acquire all of the issued and outstanding shares of Reefton (the “Reefton Shares”) in exchange for common shares in the capital of First Uranium (the “First Uranium Shares”) in a reverse takeover transaction (“RTO”) to be completed by way of plan of arrangement or such other transaction structure as is agreed to by the parties (the “Transaction”). The Transaction is a “fundamental change” under the policies of the Canadian Securities Exchange (the “CSE”). Upon successful completion of the Transaction, the Company will continue the business of Reefton as further described below.
Robert Dubeau, CEO of First Uranium Resources, stated: “This acquisition is many months in the making and represents a transformational transaction for our shareholders, offering exposure to a world class, high grade gold exploration package in New Zealand, highlighted by the recently acquired Glamorgan Tenement which resides only 2.8 Km away from Oceana Gold’s developing WKP Mine. The potential for Glamorgan to be analogous to WKP has our team eager to explore this compelling geological setting. We are here in an attempt to uncover a WKP lookalike for the benefit of all stakeholders. WKP Mine hosts 1.5 Million tonnes at a grade of 13.5 grams indicated plus 2.3 Million Tonnes at 9.4 grams inferred. In addition to Glamorgan, the newly discovered Pactolus Vein within the prolific Reefton District offers shareholders significant upside via an expected district wide exploration program.”
Oliver Lennox King, Chairman, Largest Shareholder and co-founder of Reefton Goldfields, commented: “When I first saw the Reefton project in 2018, I quickly noted the resemblance to a number of high-grade projects I have encountered during my career. We quickly assembled a team, led by Simon Henderson, to prove out the concept that this prolific district remains largely untested by modern exploration for close to a century. I am proud of the team we have built and excited to be part of the reemergence of this important gold district which is seeing renewed interest from a number of explorers and developers. We believe that the large treasury and elevated grades of the region as well as our proven team set us apart from the large number of unfunded exploration stage peers in the sector.”
Peter Marrone, Founder and Exec Chair of Yamana Gold and a large shareholder of Reefton commented: “Following a period of review and due diligence, I have become a significant shareholder of Reefton. Over the past two years, I have been active in my review of Reefton. While the orogenic system has always been highly prospective, with the potential to create a lot of value, the recently staked epithermal system is impressive in its own right. I have been consulted from time to time by management and I look forward to continuing to provide strategic advice. High-grade gold projects in high quality mining jurisdictions are increasingly scarce and I am impressed by the historical tenor of production in the districts in which Reefton holds interests, adding to which is identified high grade targets in both systems. With this transaction, Reefton has the balance sheet to take a methodical approach to exploring these high grade targets.”
Summary of the Transaction
First Uranium and Reefton have entered into the LOI, which sets out certain terms and conditions pursuant to which the proposed Transaction will be completed. The deal terms outlined in the LOI are subject to the parties successfully entering into a definitive agreement (the “Definitive Agreement”) in respect of the Transaction.
Pursuant to the Transaction, each outstanding Reefton Share shall be exchanged for 1.6 First Uranium Shares resulting in the issuance of an aggregate of 112,456,875 First Uranium Shares to Reefton shareholders. At present, the parties do not anticipate that a financing or private placement will be completed in connection with the Transaction. No finder’s fee is payable by First Uranium in connection with the Transaction; it is expected that Reefton will pay a finder’s fee of $100,000 in connection with the Transaction.
The proposed Transaction is subject to a number of conditions including, but not limited to, approval of the plan of arrangement by the British Columbia Supreme Court, review and approval of the Canadian Securities Exchange, and minimum cash on hand in First Uranium of $7,500,000:
Resulting Issuer Capital Structure
Assuming completion of the Transaction, the entity resulting from the Transaction (the “Resulting Issuer”) will have outstanding approximately 193,583,464 common shares (which includes approximately 112,456,875 First Uranium Shares to be issued to existing Reefton shareholders pursuant to the Transaction), no options and 17,030,635 purchase warrants to acquire First Uranium Shares, including 8,480,000 share purchase warrants issued to former warrant holders of Reefton. All share purchase warrants shall be amended to have an exercise price of $0.20 and expiration on March 31, 2025. All First Uranium dilutive securities are expected to expire or will be cancelled in connection with the Transaction.
Escrow Conditions
Subject to requirements of the CSE and applicable securities laws, upon closing of the Transaction:
a) existing shareholders of First Uranium who hold 5% or greater of the issued and outstanding shares of First Uranium agree to have their First Uranium Shares subject to escrow periods of 18 months, with 25% of the shares being released every 3 months, with the first release occurring 9 months after the closing of the Transaction; and
b) First Uranium Shares issued in exchange to Reefton shareholders who hold 5% or greater of the issued and outstanding shares of Reefton will be subject to hold periods of 18 months, with 25% of the shares being released every 3 months, with the first release occurring 9 months after the closing of the Transaction.
Resulting Issuer Directors and Officers
If the Transaction is completed, the CEO of the Resulting Issuer shall be Simon Henderson. It is anticipated that the board of directors of the Resulting Issuer shall be reconstituted to consist of up to 5 directors, of which 4 individuals shall be the nominees of Reefton and 1 individual shall be a nominee of First Uranium.
About Reefton
Reefton is a private company incorporated under the laws of the Province of British Columbia, and has a head office in Vancouver, British Columbia.
Reefton, through its wholly owned subsidiary, Reefton Gold Limited, owns the Reefton Goldfields Project. The Reefton Goldfields Project comprises a group of three (3) minerals permits, with a combined area
of 56,058.8 hectares, covering ~50% of the Reefton Goldfield on the west coast of New Zealand’s South
Island.
Within Reefton’s project area historic recorded gold production was 696K oz at a recovered grade of~20 g/t Au. Several of the deposits typically returned higher grades for example Reefton’s Capleston historic workings produced 134,926 oz at an avg grade of 1.58 oz/t Au (49 g/t Au). *1 Barry, J.M., 1993. The History and Mineral Resources of the Reefton Goldfield. Ministry of Commerce Resource Information Report No. 15.
Reefton’s science data driven mineral systems approach to exploration has demonstrated success in the discovery of the Pactolus vein, a greenfield discovery 1km east of the Capleston historic mines.
Channel sampling of the Pactolus discovery outcrop returned 7m with an average grade of 16.6 g/t Au, and drilling highlights include 12m @ 9.41g/t Au (DD_PAC_04), 5m @ 6.28 g/t Au (DD_PAC_02), 2m @ 8.2 g/t Au (DD_PAC_22).*2 Calculated with a 1.5ppm Au cut-off and up to 2m internal dilution. Recent mapping and 3D modelling shows a second mineralised structure that may hold to key to the orientation and dip of the high-grade shoot to be targeted in the next drilling campaign.
Near-mine targets around the historic mining have been highlighted with detailed geochemical surface sampling and modelling; these are planned for drilling contemporaneously with the Pactolus project.
Extensive soil sampling over permissive structures have uncovered numerous new gold anomalies to pursue.
About Glamorgan
Reefton’s Glamorgan Prospect comprises one permit application with an area of 4664.5 ha in the Hauraki district, southern Coromandel; on the east coast of New Zealand’s North Island.
Reefton is excited about the potential within this permit where previous exploration has outlined a 3.8km zone of silicification, veining and alteration with > 50 ppb gold in soils over its 3.8km length. Microcrystalline quartz, opaline and chalcedonic quartz, indicate high levels in the epithermal system with Au-As-Sb-Hg geochemistry indicates above or upper levels of a bonanza zone. Rock samples on surface up to 95 g/t gold are recorded in previous exploration reports. These are classic surface features of a major epithermal gold-silver system, and the possibilities of this and several other prospects within the permit area, along with its proximity to OceanaGold’s WKP Project make this a compelling
exploration endeavour. OceanaGold’s WKP: Indicated Resource of 1.5 million tonnes grading 13.5 g/t
Au and 26.6 g/t Ag for 0.64 Moz Au and 1.26 Moz of silver within the East Graben Vein ("EG"). Inferred Resources total 2.3 million tonnes at a grade of 9.4 g/t Au and 21.8 g/t Ag for 0.70 Moz of gold and 1.62 Moz of silver, with more than 80% of the Inferred Resource contained within the EG and two high-grade footwall veins (collectively, the "EG Vein Zone") (see R & R Annual Statement, March 31, 2022). (Source: https://newsreleases.oceanagold.com/2022-12-13-OceanaGold-Provides-Exploration- Update-for-Wharekirauponga,-Haile-and-Didipio
Simon Henderson CP, AUSIMM; a qualified person under NI 43-101 has reviewed and approved the technical disclosure contained herein.
About First Uranium
First Uranium is a resource exploration issuer focused on locating and exploring natural resource projects in North America. For further information, please refer to First Uranium’s disclosure record on SEDAR (www.sedar.com).
Further Information
More details will follow in the Company’s Information Circular and the Resulting Issuer’s Listing Statement that will comply with the listing requirements of the CSE Policies.
There can be no assurance that the Transaction will be completed as proposed, or at all. Investors are cautioned that, except as disclosed in the Listing Statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
For further information, please contact the Company at 604-687-7130 or by email at:
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this news release
CAUTION REGARDING FORWARD-LOOKING INFORMATION This news release includes certain statements that may be deemed “forward-looking statements”. All statements in this new release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur and specifically include statements regarding the proposed Transaction, the Definitive Agreement, the capitalization of the Resulting Issuer, escrow conditions on First Uranium Shares and Reefton Shares, the Listing Statement and the future prospects of the Resulting Issuer including any future work on The Reefton Goldfields Project . Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.